Market Liquidity Incline Due To Latest Developments in the Middle East 27.08.2013

Join Tom as he describes recommended means of approach to the markets at times of war. Also, a through explanation on recent developments in the German market.

 

Yen Enjoys Gains on Back Flight From Emerging Markets

It was reported on 27 August 2013 that the Japanese Yen had succeeded in making gains against many of its major rivals. Analysts note that the move by investors to the can be primarily sourced to the attempt by many to transfer their assets from emerging markets back to the haven assets.

Readers may remember that many investors have begun to pull their holdings out of countries like India, Thailand and other developing economies. Analysts point to the lack of infrastructure in those places to support the growth of their businesses, as well as the reemergence of the Western economies as causes behind this transfer of assets.

Analysts do not believe that this sudden uptick for the Yen to be indicative of either a loss to the Yen by its rivals such as the USD, GBP or EURO, nor does it imply that the recovering economy has made enough of the reforms that will be necessary to draw back investors.

Analysts assess that the Yen may continue to be a choice spot for investors to move their currency assets while the markets begin to stabilize. That said, it is unlikely that it will make any significant gains against its more established peers in the near term.

Germany to Release Jobs Figures Thursday

The Unemployment numbers for the month of August are set to be made public on Thursday 29 August 2013 by the Eurozone’s largest economy. At this time, many experts believe that the rate will remain constant, with little to no change expected.

Analysts note that Germany has been at the forefront in driving the European Union’s economic recovery, having produced a string of positive reports on metrics such as manufacturing and others that have helped to push forward the efforts towards a recovery.

For its part, the Euro has succeeded in making gains over the past two weeks against many of its rival currencies, including the US dollar as many investors have expressed trepidation concerning the ability of the US economy to withstand the cuts to the $85 billion stimulus package that has overshadowed the American financial system in recent years.

Traders are advised to proceed with caution concerning the EURO in its pairings against other currencies in trading as the markets may react negatively over the failure to significantly adjust the unemployment rates.

High Volatility Hits Aussie Hard

The Aussie was reported on 27 August 2013 to have suffered losses against all of its rival currencies due to significant increases in market volatility. According to the reports, the Aussie has been entrenched after reaching a six week high for volatility, further suppressing its value.

Analysts point to the rise of housing prices in the developed market countries as having added to the level of volatility for the Australian currency.

Traders are advised to proceed with extreme caution in their investments with the Aussie against other peer currencies over the coming week as it will likely continue to suffer in its value.